Comparing PDF Solutions (PDFS) & FormFactor (NASDAQ:FORM)

FormFactor (NASDAQ: FORM) and PDF Solutions (NASDAQ:PDFS) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Valuation and Earnings

This table compares FormFactor and PDF Solutions’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
FormFactor $383.88 million 3.28 -$6.55 million $0.26 66.35
PDF Solutions $107.46 million 4.62 $9.10 million $0.14 111.00

PDF Solutions has higher revenue, but lower earnings than FormFactor. FormFactor is trading at a lower price-to-earnings ratio than PDF Solutions, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for FormFactor and PDF Solutions, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FormFactor 0 1 5 0 2.83
PDF Solutions 0 1 1 0 2.50

FormFactor presently has a consensus price target of $18.40, suggesting a potential upside of 6.67%. PDF Solutions has a consensus price target of $20.00, suggesting a potential upside of 28.70%. Given PDF Solutions’ higher possible upside, analysts clearly believe PDF Solutions is more favorable than FormFactor.

Risk and Volatility

FormFactor has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, PDF Solutions has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Profitability

This table compares FormFactor and PDF Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FormFactor 3.68% 16.80% 11.20%
PDF Solutions 4.08% 2.10% 1.88%

Institutional & Insider Ownership

84.1% of FormFactor shares are owned by institutional investors. Comparatively, 82.4% of PDF Solutions shares are owned by institutional investors. 2.3% of FormFactor shares are owned by insiders. Comparatively, 16.2% of PDF Solutions shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

FormFactor beats PDF Solutions on 8 of the 14 factors compared between the two stocks.

FormFactor Company Profile

FormFactor, Inc. is a provider of test and measurement solutions. The Company’s segments include the Probe Cards segment and Systems segment. The Company designs, manufactures and sells multiple product lines, including probe cards, analytical probes, probe stations, integrated measurement systems, thermal sub-systems, reliability test systems, and related services. Its products provide electrical information from a range of semiconductor and electro-optical devices and integrated circuits (devices) from development to production. Probe Cards segment consists of probe card products and analytical probes. Systems segment consists of wafer probing, thermal and reliability products to enable precision on-wafer measurement of integrated circuits. Systems products are used in the early phases of the development and characterization of semiconductor processes.

PDF Solutions Company Profile

PDF Solutions, Inc. is a provider of infrastructure technologies and services for integrated circuits (IC). The Company’s technologies and services focus on the IC manufacturing process life cycle. It operates in the segment of licensing and implementation of yield improvement solutions for integrated circuit manufacturers. The Company’s solutions combine software, test chips, an electrical wafer test system, methodologies and professional services. The Company has developed solutions for yield simulation, analysis, loss detection, and improvement. Its characterization vehicle infrastructure (CVi) enables customers to electrically characterize the manufacturing process, and establish fail-rate information needed to calibrate manufacturing yield models and prioritize yield improvement activities. Its Exensio YieldAware solution combines software and services to enable customers to collect and combine product test data and equipment signals during production.

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